© | tm | ms erp) ate are vy 7 Qertamtanbiges g Oxcunnuemannn 9 Qartonigtins 10 Que ' ‘Modi at informal BRICS. ‘Sudan's Darfur defence abe Prudent prescription: on MSME sector ouscaree fw) mmo Bom af al A ‘An RBI panel's suggestions on the MSME sector cut to the heart of crucial issues T esis snatandeiamentrpises tt storia ndiisotolakyxpineof growth contain oe than 28% of the GDP and about 45% to manufacturing output. Itisalsoa true reflection of economics where people really matter. Providing employment to about 111 million people, the sector's health is crucial tothe economy's vitality and society's well being, An expert committee constituted by the Reserve Bank of India has in this context submitted a substantially germane study on the issues bedevilling MSMEs and made a fairly exhaustive set of recommendations to redress them. The panel is emphatic that the policy environment needs to be urgently ref sed. To that end, itis imperative that the thrust of the njoy The Hindus new online experience wit tisements, personal xptore plans | ee given the conducive business environment and the availability of infrastructure and exit policies, the experts suggest thata newlaw ought to address the sector's biggest bottlenecks, including access to credit and risk capital. A substantial part ofthe study is, justifiably devoted to reimagining solutions to improve credit flow to MSMEs. For instance, the experts recommend repurposing the Small Industries Development Bank of India, In its expanded role itis envisaged that the SIDBI could not only deepen credit markets for MSMEs in under-served regions by being a provider of comfort to lenders including NBFCs and micro- finance institutions, but also become a market-maker forSME debt. Sinhaed panet proposes 5000 ‘crore stessed eset und or SMEs With technology, especially digital platforms, having become so ubiquitous, the panel has madea case for greater adoption of, technology-facilitated solutions toa plethora of problems encountered by the sector. To address the bugbear of delayed payments, the mandatory uploading of invoices abovea specified amount to an information utility isa novel approach. The aim isto name and shame buyers of goods and services from MSMESs to expedite settlements to suppliers. While it does sound simplistic, and banks alot on the power of moral suasion, itis tack worth trying. Another suggestion entails expediting the integration of information on the Government e-Marketplace, or GeM, platform with the Trade Receivables Discounting System. The goal here too isto boost liquidity at MSMEs. A noteworthy recommendation urges banks to switch to cash flow- based lending, especially once account aggregators are operati” ‘and able to provide granular data on borrowings. The RBI and jommendatie rien Explore Plans | eePrintable version |Jun 28, 2019 11:45:49 AM | https://www.thehindu.com/opinion/editorial/prudent- prescription/article28191294.ece (© THG PUBLISHING PVT ITD.